Stephen Foley: Now, where is US inflation hiding?

US Outlook: Some people will never be persuaded that inflation is dead. But the US Government released a picture of the labour market here yesterday, and it was notable for the absence of any wage inflation pressures.

How could it be otherwise, with the unemployment rate at 9 per cent and the number of citizens out of work at 13.7m still? Average hourly earnings were 1.9 per cent higher in April compared with the same month last year, actually a slowdown from March.

The number of new payrolls beat economists' expectations, just as they had started to think their numbers were optimistic, so that brought some comfort yesterday. But the number of new temporary jobs, often an indicator that employers are on the verge of hiring full-time staff, dipped in April. Getting out of the post-recession hole is going to be tough.

Worst of all, 5.8m Americans have been out of work for half a year or more, and many may find themselves undesirable even to employers with vacancies. This problem isn't even on the radar in Congress yet, despite the warnings of Ben Bernanke at the Federal Reserve.

Inflation hawks these days have the certainty of the conspiracy theorist, but in reality Mr Bernanke's description of the current inflation spike as being "transitory" looks about right – especially now the speculative bubble in commodities prices is deflating.

One more thing from yesterday's payroll numbers: some 30,000 jobs were created in the food service and pubs sector, suggesting food price inflation hasn't stopped Americans eating out, either.